IN THE HIGH COURT OF KERALA AT ERNAKULAM
ST.Rev..No. 72 of 2009()
1. HANDICRAFT DEVELOPMENT CORPORATION OF
... Petitioner
Vs
1. STATE OF KERALA,REPRESENTED BY THE
... Respondent
For Petitioner :SRI.S.ANIL KUMAR (TRIVANDRUM)
For Respondent : No Appearance
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice K.SURENDRA MOHAN
Dated :01/04/2009
O R D E R
C .N. RAMACHANDRAN NAIR &
K. SURENDRA MOHAN, JJ.
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S.T. Rev. No. 72 OF 2009
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Dated this the 1st day of April, 2009
JUDGMENT
Ramachandran Nair,J.
Heard counsel for the revision petitioner and the Government
Pleader. Petitioner is a Corporation under the control of Government
of Kerala engaged in procurement and sale of handicrafts products,
handloom goods, etc. The only dispute pertains to disallowance of
exemption claimed on turnover of Rs. 69,68,044.85 which according to
the petitioner represents sale of handicrafts goods during exhibition.
Notification SRO 1729/93 among other things provided exemption on
the sale of handicrafts goods made by the Corporation, if such goods
are produced within the State. The condition for exemption is that
handicrafts goods sold by the Corporation should be produced within
the State. According to the petitioner, goods are produced by artisans
in Kerala and since most of of them are not registered dealers, such
goods are procured through bought notes issued by the Corporation. If
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the turnover represents handicrafts goods produced in Kerala, then of
course petitioner is entitled to exemption. However, there is nothing
wrong in the department calling for proof of production of goods
within the State. In fact there is practical difficulty for the Corporation
to furnish proof of production of goods within the State. We are of the
view that if goods are locally procured necessarily it has to be assumed
that goods are produced within the State because such huge trade
quantity cannot be brought from outside the State without sales tax
documents. Even though Government Pleader submitted that
exemption is only on handicrafts goods produced by the Corporation,
such contention is unacceptable because exemption is on sales turnover
and there is no condition that the goods should have been produced by
the Corporation itself. In fact the main purpose of the Corporation
engaging in the marketing of handicrafts products is to promote the
artisans who do not have marketing net work. Therefore handicrafts
goods produced within the State and sold by the Corporation after
purchase from artisans or co-operative societies or such organisation
will entitle for exemption. We feel if the assessing officer has tallied
inter-State purchases, stock transfers received from outside the State
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with the total sales he would have easily found out whether turnover of
sales in respect of which exemption is claimed represent goods locally
purchased. If goods sold are admittedly handicrafts goods and if those
are not brought from outside the State then petitioner is entitled to
exemption as the only inference possible is that such goods are
produced within the State. Since these matters have not been examined
by any of the authorities we set aside the orders of the Tribunal and that
of the assessing officer on this issue and remand the matter to the
assessing officer to verify the accounts once again and grant exemption
on sales of so much of handicrafts goods locally purchased.
ST revision is disposed of as above. Since the matter is already
12 years old, we direct the assessing officer to revise the assessment
within two months from the date of receipt of a copy of this judgment.
(C.N.RAMACHANDRAN NAIR)
Judge.
(K. SURENDRA MOHAN)
Judge.
kk
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